EUR/USD Analysis: recovering just modestly as sentiment improves

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1157

A better market mood provides limited support to the high-yielding EUR.
US Existing Home Sales ARE seen rising by 2.7% after falling 4.9% in March.

The EUR/USD pair remains under selling pressure, having extended its decline to 1.1141 early London, trading now a few pips above the level. The dollar remains strong, as despite trade tensions prevails, the market's sentiment improved after the US Commerce Department eased the pressure on US companies that do business with Huawei, allowing operations for the next three months. Equities recovered, yet high-yielding currencies weren't able to attract buyers, and if fact, fell. The greenback's latest strength was the result of Fed's Chief Powell speech, who poured cold water on speculation the central bank could cut rates amid tensions between the US and China, saying it's 'premature' to speculate on that. Government bond yields are on the rise, although within last week's levels.

The macroeconomic calendar didn't offer relevant data so far today, although the EU Commission will shortly publish May preliminary Consumer Confidence, seen improving modestly to -7.6 vs. the previous -7.9. Ahead of it, the US will publish April Existing Home Sales, seen rising by 2.7% after falling 4.9% in March, while a couple of Fed speakers will hit the wires in the American afternoon.

The EUR/USD pair is still at risk of falling further, as it's trading below the 61.8% retracement of the latest bullish run at around 1.1170, the immediate resistance area. In the 4 hours chart, the 20 SMA maintains a sharp downward slope, converging with the Fibonacci level, and below the larger ones. Technical indicators in the mentioned chart hold within negative levels, lacking clear directional strength as they are now recovering within range. The pair could gain some ground if it surpasses the mentioned Fibonacci resistance, yet it remains intrinsically bearish. Below the daily low, the yearly one is the next bearish target.

Support levels: 1.1140 1.1110 1.1080

Resistance levels: 1.1175 1.1220 1.1250

View Live chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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